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Restructuring of Port Charges in South Africa

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Restructuring of Port Charges in South Africa COPYRIGHT AND CITATION CONSIDERATIONS FOR THIS THESIS/ DISSERTATION o Attribution — You must give appropriate credit, provide a link to the license, and indicate if changes were made. You may do so in any reasonable manner, but not in any way that suggests the licensor endorses you or your use. o NonCommercial — You may not use the material for commercial purposes. o ShareAlike — If you remix, transform, or build upon the material, you must distribute your contributions under the same license as the original. How to cite this thesis Surname, Initial(s). (2012) Title of the thesis or dissertation. PhD. (Chemistry)/ M.Sc. (Physics)/ M.A. (Philosophy)/M.Com. (Finance) etc. [Unpublished]: University of Johannesburg. Retrieved from: https://ujdigispace.uj.ac.za (Accessed: Date). E \}\O ~.~ \E\~ RESTRUCTURING OF PORT CHARGES IN SOUTH AFRICA by HENRIETTE CHRISTA VAN NIEKERK THESIS Submitted in fulfillment of the requirements for the degree DOCtOR OF COMMERCE in the field of TRANSPORT ECONOMICS in the <, FACULTY OF ECONOMICS AND BUSINESS SCIENCE at the RAND AFRIKAANS UNIVERSITY PROMOTER: PROF W PRETORIUS CO-PROMOTER: MR B C FLOOR SEPTEMBER 1994 • ACKNOWLEDGEMENTS I wish to express my sincere appreciation and gratitude to all those who enabled me to complete this thesis. In particular I wish to thank: Mr Be Floor, for his encouragement, support and guidance throughout the study, Prof W Pretorius, for his advice and assistance as promoter, Mr NW Oosthuizen, Chief Executive of Portnet, for making the study possible and providing the opportunity to gather information overseas and for his co-operation and assistance throughout the course of the study, All the personnel of Portnet, who assisted with the provision of information and statistics, Dr 0 Iheduru, Assistant Professor of International/Economic Relations, James Madison College, Michigan State University, USA, for acting as external examiner and his valuable contribution, Mr AN Davidson, former Chief Executive of Portnet and Mr SL Goldblatt, Chairman of Island View Shipping (Pty) Ltd, for examining and commenting, Ms BJ de Klerk, for technical assistance and the typing of the thesis, and my parents. family and friends, for their encouragement. Henriette SYNOPSIS Port charges in most of the ports in the world have evolved in a haphazard manner over many years. In recent years, competition between ports and the drive towards commercialisation and privatisation have necessitated the restructuring of the charges in many ports according to sound economic principles. The contention in this thesis is that the charges in South African ports can be restructured in accordance with such principles, provided the monopoly profits at present earned on wharfage are eventually foregone, but that revenue neutrality can be maintained during the phasing-in period. The existing tariffs for all South African ports are then restructured in accordance with the principles involved and examples of the port expenses of ship and cargo owners before and after the restructuring are given. While these examples prove the hypothesis, it is pointed out that conclusions cannot be simplistically derived from such comparisons, because the efficiency in the use of port land and the handling of cargo will increase as an outcome of the incentives to such efficiency, which the new charges will create. SINOPSIS Hawetariewe in die meeste hawens in die wereld het op In lukrake manier ontwikkel. Oor die laaste paar jaar het mededinging tussen hawens en die motivering vir kommersialisering en privatisering die meeste hawens genoodsaak om tariewe te herstruktueer ooreenkomstig fundamentele ekonomiese beginsels. Die hipotese in hierdie proefskrif is dat tariewe in Suid Afrikaanse hawens herstruktueer kan word ooreenkomstig gesonde ekonomiese beginsels, mits die monopolistiese winste wat uit kaaigelde verkry word uiteindelik prys gegee word, maar dat die hawe-owerheid wel dieselfde inkomstes gedurende die infaseringstydperk kan verkry. Die bestaande tariewe van al die Suid Afrikaanse hawens is dan geherstruktueer ooreenkomstig die gestelde ekonomiese beginsels en voorbeelde van die hawe-uitgawes vir skeep- en vrageienaars voor en na die instel van die nuwe tariewe is gegee. Alhoewel hierdie voorbeelde die hipotese bewys is dit uitgelig dat betekenisvolle vergelykings nie sondermeer getref kan word nie, siende dat die doeltreffendheid in die gebruik van hawegrond en in die hantering van vrag sal toeneem as In uitwerking van die aansporing tot doeltreffendheid in die nuwe tariewe. INDEX SYNOPSIS LIST OF TABLES LIST OF FIGURES GLOSSARY OF TERMS 1. ~O])lJ<:TIO~ 1 1.1 Motivation for the study 1 1.2 Purpose of the study 2 1.3 Methodology " 5 1.4 Outline of the thesis 6 2. roar <:O~STITlJTIO~S 7 2.1 Constitutional status of ports 7 2.2 The authority and obligations of a port authority 7 2.3 Ownership of ports - 8 2.3.1 Government-owned ports or national ports 8 Types of government-owned ports 8 (a) The landlord port " 9 (b) The tool-port , 9 (c) The operating port 9 National interest in ports 10 Merits of national ports 10 Demerits of national ports 10 2.3.2 Self-governing ports/public trust 11 2.3.3 Privately owned ports 12 2.3.4 Municipal ports 12 2.3.5 Railway ownership 12 2.4 Constitution of South African ports 13 2.5 Ultimate responsibility of Government 14 2.6 Constitutions of some ports overseas 14 2.6.1 Fremantle (Fremantle Port Authority), Australia 15 Constitutional status 15 Functions of the Port Authority 15 2.6.2 Sydney (MSB Sydney Ports Authority), Australia 16 Constitutional status 16 Functions of the Port Authority 17 2.6.3 Melbourne (Port of Melbourne Authority), Australia 18 Constitutional status 18 Functions of the Port Authority 19 2.6.4 Yokohama (The Port and Harbour Bureau of the City Government of Yokohama), Japan 20 Constitutional status 20 Functions of the Port and Harbour Bureau 21 2.6.5 Kobe (port and Harbour Bureau, City of Kobe Government), Japan 21 Constitutional status 21 Functions of the Port and Harbour Bureau 22 2.6.6 Hong Kong (Marine Department of the Government of Hong Kong) 22 Constitutional status 22 Functions of the Marine Department 23 2.6.7 Singapore (port of Singapore Authority) 23 Constitutional status ~ 23 Functions of the Port Authority 24 2.6.8 French ports 25 2.6.9 Canadian ports 26 Ports Canada (Canada Ports Corporation) 26 Harbour Commission 27 Public Harbours 27 2.6.10 Conclusions on constitutions of ports overseas 28 2.7 Appropriate constitution for South African ports 30 3. PRICING OF PORT SERVICES 33 3.1 Pricing goals 33 3.2 Pricing principles ~ 33 3.2.1 State enterprises/public utilities 33 Theory 33 Theoretical example 34 3.2.2 State enterprise/Public utility pricing in practice 38 3.2.3 Pricing by state corporations 39 3.2.4 Pricing by profit orientated companies 39 3.3 Appropriate pricing by ports .40 3.3.1 Charges for the use of basic port infrastructure .40 3.3.2 Charges for the use of other infrastructure .41 3.3.3 Charges for other assets " .41 3.3.4 Charges for terminals 42 3.3.5 Charges for marine services .42- 3.3.6 Charges for services relating to cargo .42 3.4 Costing difficulties 42 3.4.1 Cost recovery 42 3.5 Value of service pricing 44 3.6 Pricing by Portnet 45 3.6.1 Historical basis 45 3.6.2 Appropriate pricing policy .46 4. STRUCTURE OF EXISTING PORT TARIFFS .49 4.1 Current tariffs 49 4.1.1 Port charges 49 4.2 Basis for determination and by whom payable 50 4.2.1 Port dues 50 4.2.2 Berth dues 50 4.2.3 Pilotage services 50 4.2.4 Tug assistance 50 4.2.5 Berthing services/mooring and unmooring services 51 4.2.6 Launch services/miscellaneous craft services : .51 4.2.7 Shiprepair services/dues for the use of drydocks/ floating docks/syncrolifts/slipways 51 4.2.8 Wharf crane hire (exceptcontainer wharf crane hire) 51 4.2.9 Miscellaneous marine charges 51 4.2.10 Wharfage 51 4.2.11 Rent, storage and demurrage 52 4.2.12 Charge for landing, shipping and transhipping of cargo 52 4.2.13 Charge for miscellaneous cargo services 52 4.2.14 Charge for containerised cargo 52 4.2.15 Relationship between costs and charges 52 4.3 Basic tariff structure in ports included in study visit. 52 4.3.1 Australia 52 4.3.2 Port of Kobe ..........................•..........................................53 4.3.3 Port of yokohama 53 4.3.4 Port of Singapore 0, •••••••••••••••••••••••••••••••••, ••••••••••••••••••••••••55 4.3.5 Port of Hong Kong ~ 55 4.4 Tariff structure in selected other ports 56 4.5 Names of charges .. 56 4.6 Comparison of charges 56 4.7 Conclusion 56 Appendix 57 S. COSTING AND PRICING IN PORTS INCLUDED IN STUDY VISIT 68 5.1 Goal of visit......................................................................•........68 5.2 Fremantle (Fremantle Port Authority) 68 5.2.1 Port tariffs ' 68 5.2.2 Costing 69 5.2.3 Beneficiaries of port use 70 5.3 Sydney (MSB Sydney Ports Authority) 70 5.3. 1 Port tariffs 70 5.3.2 Costing ...........................................................................•71 5.4 Melbourne(port of Melbourne Authority) 71 5.4.1 Port tariffs 71 5.4.2 Costing 72 5.5 Yokohama (The Port and Harbour Bureau of the City Government of Yokohama) 72 5.5. 1 Port tariffs 72 5.5.2 Costing '.' 73 5.6 Hong Kong (Marine Department of the Government of Hong Kong) 74 5.6.1 Port tariffs : 74 5.6.2 Costing ~ 75 5.7 Singapore(Port of Singapore Authority) 75 5.7.1 Port tariffs 75 5.7.2 Costing , " 75 5.8 Conclusion from study visit ......................................................•.....76 6.
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